Broadcom, Inc. | $AVGO Stock | Shares Rise 4.5% On $12 Billion Share Repurchase Announcement


Broadcom, Inc. (NASDAQ: AVGO)


Shares of Broadcom gained 4.5% in the extended session on Thursday, after the chipmaker said its Board of Directors had authorized it to buy back up to $12B of its own shares. The tech giant said the repurchase program would start right away and come to a close next year in November.

Following the news, the company’s stock climbed to $250.17 gaining 4.5% in after-hours trading. The buyback program comes barely a month after the company was blocked from acquiring Qualcomm by President Donald Trump.

AVGO Earnings & Outlook


Broadcom reported its earnings for Q1 of fiscal 2018 on March 15. Net revenue increased by 10% to $5,327 million compared to $4,139 million in a similar period last year. Gross margin for the quarter was $2,628 million compared with gross margin of $2,382 million in the same quarter in 2017. Operating expenses stood at $1,685 million versus $1,495 million in the same quarter last year.

During the first quarter of 2018, Broadcom received $237 million after selling real property and $782 million from selling its businesses. The company also made $1,685 million in cash from its operations. The company paid out $1.75 cash dividend totaling to $717 million to shareholders of common stock in December last year.

Broadcom CEO Comments

Tom Krause, the company’s Chief Executive Officer made the following statement: “The initiation of a stock repurchase program enhances our capital allocation strategy and provides us with a complementary tool to deliver value to our shareholders. We are maintaining our policy of delivering 50% of trailing 12-month free cash flow to shareholders in the form of dividends while adding the ability to use the balance of our free cash flow not only for acquisitions but also for opportunistic buybacks.”

Broadcom, Inc. Company Profile

Broadcom was previously called Avago Technologies Ltd before taking its present name in 2016. The company came into existence in 2005 and its headquarters is in Singapore. It engages in the design, development, and supply of a wide range of semiconductors. The company focusses on analog III-V based devices, as well as mixed and digital signal complementary metal-oxide semiconductor-based products.

The products made by the company include wired and wireless communications chips, as well as microwave, radio-frequency and optoelectronics components, custom chips and power amplifiers. Broadcom’s products are used in multiple applications, including telecommunications equipment, mobile phones, storage networking gear, consumer appliances, data networking, displays, servers, factory automation, and printers. – Reuters